The Taxonomy, initially proposed in May 2018, will establish a common definition of what economic activities are environmentally sustainable or not.
The Technical Expert Group (TEG) on Sustainable Finance has published its final recommendations (plus an annex) for the European Commission on the Taxonomy – or, a ‘framework to facilitate sustainable investment’.
This framework will enable investors to reorient their investments towards more sustainable assets and incentivise companies to change their economic behaviours. The EU hopes this will accelerate progress towards achieving climate neutrality by 2050 and Paris targets by 2030.
The TEG’s final report contains recommendations on the design of the EU’s ‘green list’, including guidance on how companies and financial institutions can use it and the technical screening criteria. The Commission will use these recommendations to develop rules setting out the EU’s final classification of green activities.
Objectives and requirements for classification
In December 2019, EU Member States and the Parliament reached a political agreement on the final text of the Taxonomy and how it should classify economic activities, now giving it a legal basis.
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